Five steps you can take

An unauthorized money transaction, incorrectly charged fee or interest, missed deadline, delay in payment of an amount owed to you – these are just some of the problematic situations that may arise when using financial products or services. How these issues will be addressed and resolved is directly related to trust and, accordingly, the participation of consumers in the financial system. That is why, among the leading principles of consumer protection is the provision of working and effective mechanisms for resolving problems and consumer disputes when using financial products and services. In this regard, regulatory provisions have been introduced in European and Bulgarian legislation.

To be able to react promptly to a problem and protect your rights in a dispute with a financial company regarding a financial product or service you use, you must be aware of the practical aspects and the main steps in this process. Here are some of them:

 

1.      Assistance from the financial company regarding the problem

It is important to react promptly to an identified problem with the financial product you use. As a first step, notify the financial company and seek assistance – whether by calling, visiting an office or in another appropriate manner.

 

2.      Written complaint to the financial company

You can submit a written complaint to the financial company directly, as well as if, after seeking assistance, the problem has not been resolved to your satisfaction. Financial companies are required to have publicly disclosed consumer complaint management policies available on their websites. They outline the methods for submitting complaints and signals, the deadlines for the various actions on them and other essential aspects of the process.

Complaints are submitted in writing electronically, in person, or by mail. Along with the personal data of the complainant, a specific description of the problem, the requests in this regard and copies of the documents related to the case should be submitted. Response times may vary in different situations and for different companies but cannot exceed one month after submitting all required documents.

We advise you to review the contract and documentation related to the financial product before filing a complaint. Pay attention to the conditions, deadlines and other details to make sure that you actually have grounds for filing a complaint. For example, you see a problem with the change in the interest rate on your loan, but it turns out that the rules for this adjustment are described in the individual terms of your contract.

A significant part of the problem can be resolved in communication with the financial company. If this is not valid for you, you can take further steps.

 

3.      Written complaints to the competent institutions

The competent institutions to which a written complaint can be filed are the Financial Supervision Commission (FSC) and the Commission for Consumer Protection (CCP). It is important to know that as administrative authorities they investigate the complaint and may impose a sanction on the company, but this does not lead to the termination of the contract or the reimbursement of a financial amount to the consumer. This can only happen if the consumer files a claim independently.

Financial Supervision Commission (FSC)

You can contact the FSC if you have a problem with insurance, investment in financial instruments, or supplementary pension insurance. The powers of the FSC regarding consumer disputes with the companies under its supervision are limited. It cannot rule on the substance of the dispute between the consumer and the company. For example, if an insurer has not ruled on a registered claim within a period of time, the regulator may impose an administrative penalty but not order the insurer to pay compensation in a certain amount. If the problem is related to the amount of determined compensation, the FSC does not have the authority to require the insurer to change it. This can be done through an out-of-court agreement with the company or via legal proceedings. You can file a complaint or signal to the FSC online, by email, or by regular mail without paying a state fee. More information, including the procedure, method and actions of the FSC regarding your complaint, is available on the institution's website.

Commission for Consumer Protection (CCP)

You can seek assistance from the CCP in cases involving unfair clauses in the general terms and conditions of consumer credit contracts and other financial services, unfair practices, misleading advertising, as well as issues related to contracts for the provision of distance financial services. The CCP website describes the procedure for submitting consumer complaints and signals. After receiving them, the institution carries out inspections, and depending on the case, issues recommendations, assists in resolving disputes and imposes sanctions in case of established violations.

 

4.      Out-of-court dispute resolution through conciliation proceedings

The CCP also assists in resolving disputes between consumers and providers of financial services through its conciliation commissions.

Conciliation proceedings are a form of alternative resolution of national and cross-border disputes between consumers and traders. They are carried out on a voluntary basis for both parties. Disputes are resolved by the general and sectoral conciliation commissions established under the CCP. This option is regulated in the Consumer Protection Act and other regulatory acts, and aims to make the process easier and less costly than court proceedings. Conciliation proceedings are initiated provided that the customer first contacts the supplier to resolve the problem and has the relevant documentation in this regard.

The five conciliation commissions at the CCP, competent to resolve disputes related to financial products and services, are:

• Payment Instruments and Settlements: Conciliation Commission for Payment Disputes.

• Credits: Sectoral Conciliation Commission for the consideration of disputes in the field of financial services, including the provision of distance financial services related to the provision of consumer and mortgage loans

• Insurance: Sectoral Conciliation Commission for the consideration of disputes in the field of insurance and insurance intermediation, including the provision of distance financial services in these sectors

• Supplementary pension insurance: Sectoral Conciliation Commission for the consideration of disputes in the field of supplementary social security, social insurance intermediation activities, including the provision of distance financial services in these sectors

• Financial instruments: Sectoral Conciliation Commission for the consideration of disputes in the field of activities and services under the Markets in Financial Instruments Act and the activities and services under the Collective Investment Schemes and Other Undertakings for Collective Investments Act, including the provision of distance financial services in these sectors.

The Conciliation Commission examines the dispute within the legally established period and issues a conciliation proposal, which the parties can accept or reject in writing. If the proposal is approved, it has the force of an agreement. In the event that one of the parties fails to comply, the other party may take the matter to court.

In the event of cross-border disputes, for example when the provider of the product or service is from another European country, consumers can turn for more information to the page of the EC for Consumer Redress in the EU. In the financial sphere, the competent authority is the Financial Dispute Resolution Network: FIN-NET, which helps resolve cross-border disputes out of court in EEA countries.

More information on various aspects of conciliation proceedings can be found on the websites of the Commission for Consumer Protection, the Bulgarian National Bank and the Financial Supervision Commission.

 

5.      Judicial resolution of the dispute

In addition to the options described above, you can seek your rights through court proceedings by filing a claim against the company whose services or products led to the dispute. Proceedings are conducted in accordance with the Code of Civil Procedure. You should keep in mind that judicial proceedings usually take time and involve the payment of state fees.

 

Useful links:

Commission for Consumer Protection

Bulgarian National Bank

Financial Supervision Commission

Consumer Protection Act

Markets in Financial Instruments Act

Collective Investment Schemes and Other Undertakings for Collective Investments Act